SPEECH 


OP 


HON.  JACOB  COLLAMER,  OF  VERMONT, 

ON  THE 

BILL  TO  PROVIDE  A  NATIONAL  CURRENCY; 


DELIVERED 


19  THE  SENATE  OP  THE  UNITED  STATES,  FEBRUARY  11,  1803. 


WASHINGTON! 

1863. 


232-52- 
(L  6>  X-S 


Lincoln  fiootr^ 


SPEECH. 

•  ... _  _ — 


The  Senate  having  under  consideration  bill  No.  486,  to 
provide  a  national  currency,  secured  by  a  pledge  of  United 
States  stocks,  and  to  provide  for  the  circulation  and  re¬ 
demption  thereof — 

Mr.  COLLAMER  said: 

I  propose,  Mr.  President,  to  remark  in  relation 
to  the  general  character  of  this  bill,  and  to  point 
out  wherein  I  think  it  is  exceptionable,  and  l  shall 
do  so,  perhaps,  somewhat  at  length. 

In  the  first  place,  I  would  say  that  I  do  not  re¬ 
gard  this  as  a  measure  in  any  respect  connected 
with  the  war.  It  is  not  a  war  measure.  I  am  the 
more  willing  to  put  it  in  that  light  from  this  con¬ 
sideration:  1  have  observed  that  almost  every¬ 
thing  that  is  asked  for,  especially  if  it  is  asked  for 
with  any  degree  of  pertinacity,  is  put  upon  that 
ground;  it  is  either  a  military  necessity  or  a  po¬ 
litical  necessity,  or  you  cannot  keep  the  Union 
together  without  it,  or  something  of  that  kind  by 
which  we  are  appealed  to,  to  let  our  conscience 
and  our  discernment  go,  and  obey  the  dictates 
pressed  upon  us.  I  do  not  view  this  as  of  that 
character.  1  take  it  that  this  war  will  come  to 
some  end  within  the  course  of  a  year  or  so — not 
exceeding  two  years  at  most.  It  is  not  necessary 
for  me  now  to  predict  what  will  be  the  form  of  that 
termination.  I  clo  not  desire  to  make  preparations 
for  its  continuing  much  longer  than  that,  at  any 
rate  not  at  present.  I  desire  that  all  preparations 
should  be  made  with  a  view  of  bringing  it  to  a 
speedy  termination;  and  1  will  not  agree  at  pres¬ 
ent  to  the  framing  of  any  measures  that  seem  to 
be  predicated  on  the  idea  of  its  continuing  a  long 
time.  I  may  at  last  be  compelled  to  view  it  in 
that  light;  but  I  shall  not  at  present. 

The  organization  of  these  proposed  banks  is 
necessarily  of  slow  operation.  If  the  bill  be  passed, 
Mr.  Chase  tells  us  in  his  report,  I  believe,  that 
nothing  can  be  expected  from  it  for  a  year  to  come, 
and  probably  not  much  for  two  years.  I  think 
that  is  the  expression  contained  in  his  report.  I 
noticed  it  the  other  day.  1  will  not  trouble  the 
Senate  with  reading  the  words;  I  have  stated  the 
substance.  I  believe  he  is  correct  in  that.  I  have 
no  occasion  to  take  issue  on  that  point.  Then,  if 
it  is  a  thing  from  which  we  are  to  expect  no  prac¬ 
tical  effect  for  this  year,  and  probably  very  kittle 
for  another  year  afterward,  we  cannot  call  this  a 


present  war  measure.  If  it  be  anything  connect¬ 
ed  with  the  war,  it  is  for  a  war  to  be  continued 
some  four,  five,  six,  or  ten  years  hence,  to  which 
view,  I  take  it,  we  will  not  at  present  accede. 

Having  laid  that  out  of  consideration  in  rela¬ 
tion  to  this  bill,  I  come  to  consider  what  are  ita 
great  purposes  and  objects,  as  stated  by  thosa 
who  framed,  recommend ,  and  support  it.  It  i* 
said  to  be  to  institute  a  great  national  paper  cur¬ 
rency  through  the  medium  of  banks,  to  be  organ¬ 
ized  under  this  act,  who  are  to  take  United  States 
stocks  and  deposit  them  in  the  Treasury,  and 
take  ninety  per  cent,  of  them  in  notes  to  circulate 
as  money,  with  which  to  do  banking  business; 
and  that  they  shall  have  twenty-five  per  cent, 
more  than  this  circulating  part  as  a  permanent 
capital  to  work  upon.  They  are  to  pay  two  per 
cent,  on  their  circulation  to  the  United  States 
Government  annually,  or  one  per  cent,  every  six 
months,  and  the  United  States  are  to  pay  them 
six  per  cent,  per  annum  on  the  bonds  in  gold. 
The  United  States  further  agree  that  they  will 
take  all  this  money  in  circulation,  receive  it  for 
and  pay  it  out  on  all  public  dues,  and  declare  it 
to  be  in  the  act  a  national  currency.  Besidea 
that  the  United  States  agree  that  they  will  guar¬ 
anty  to  the  bill-holders  the  payment  of  these  bill* 
at  the  Treasury.  If  the  banks  do  not  redeem 
them  in  currency  when  asked  for  their  redemp¬ 
tion  they  may  be  protested  and  presented  at  the 
Treasury,  and  the  Treasury  is  to  pay  them,  and 
pay  them  in  full,  whether  the  stocks  left  upon 
deposit  are  able  to  meet  them  or  not.  Besides 
this  investment  the  property  put  into  these  asso¬ 
ciations  is  itself  to  be  clear  of  taxation. 

Now,  Mr.  President,  it  is  to  be  further  under¬ 
stood,  and  is  an  integral  part  of  the  very  system,, 
without  which  it  is  good  for  nothing,  that  the 
circulation  of  the  existing  banks  of  the  country 
is  to  be  withdrawn.  Measures  are  to  be  taken 
with  those  banks  that  shall  induce  or  compe4 
them  to  take  home  their  circulation  and  put  it 
out  no  more,  so  that  this  shall  be  a  national  cur¬ 
rency.  Unless  this  latter  part  of  the  scheme  t» 
secured,  its  great  professed  object  of  making  a 
uniform  national  currency  throughout  the  United 
States  is  not  and  cannot  be  effected.  It  there¬ 
fore  implies  all  this,  and  we  must  understand 


/ 


4 


that  if  we  enter  upon  this  proposition  and  enter¬ 
tain  this  plan,  we  are  to  take  measures  in  order 
to  perfect  it  to  do  the  other  thing;  that  is,  to  de¬ 
stroy,  put  out  of  existence,  the  circulation  of  the 
present  State  banks. 

I  know  it  is  not  very  easy  for  men  who  reside 
and  have  been  brought  up  and  educated  in  differ¬ 
ent  sections  of  our  country  to  understand  the  mi¬ 
nute  business  relations  of  other  distant  sections. 
1  suppose  it  is  difficult  to  make  a  man  at  the  West 
understand  how  it  is  in  New  England  that  all  the 
ordinary  affairs  and  business  of  the  people  are  in¬ 
terwoven  with  the  banks.  The  connection  of  the 
banks  enters  into  all  the  filaments  of  our  business; 
it  is  the  warp  and  woof  of  it.  Every  little  manu¬ 
facturing  village  has  its  bank;  large  numbers  of 
the  owners  of  the  various  factories  are  also  stock¬ 
holders  in  the  bank;  that  bank  counting-room  is 
the  place  where  the  business  of  the  factory  is  done, 
where  all  its  family  affairs,  where  all  the  business 
of  the  different  mechanics  and  little  tradesmen  is 
done  through  the  bank.  Young  men  setting  up 
in  business  have  fathers  out  on  farms  who  indorse 
for  them.  What  will  be  the  effect  of  this  scheme 
now,  to  say  nothing  about  the  bank,  exercising 
no  care  or  concern  about  the  bank — that  is  not  the 
effect  that  we  are  to  contemplate;  but  what  is  the 
result  that  will  be  produced  on  th% condition  of 
society  by  the  winding  up  of  these  banks,  by  un¬ 
dergoing  this  great  process  of  transition  which 
the  bill  demhnds?  If  we  pass  this  bill,  it  lays  the 
foundation  for  passing  the  next  bill  that  comes  up 
before  us,  that  is  the  bill  for  raising  money,  in 
which  is  inserted  a  tax  of  two  per  cent,  on  the  cir¬ 
culation  of  the  State  banks,  with  a  view  to  effect 
this  object,  and  that  must  pass  if  this  does;  and 
if  this  does  not  pass,  1  take  it  that  will  not,  unless 
it  receives  large  modifications. 

I  cannot  but  be  sensible,  though  I  do  not  sup¬ 
pose  that  I  can  succeed  in  showing  it  to  others, 
that  if  you  wind  up  at  one  time  the  banks  of  the 
State  in  which  I  live — and  I  believe  it  is  so  in  the 
New  England  States  generally-,  and  as  low  down 
at  least  as  New  Jersey  and  Pennsylvania — it  can 
only  be  done  by  collecting  in  all  their  dues  and 
delivering  them  over  to  the  stockholders.  The 
whole  debts  would  have  to  be  collected  and  brought 
in  at  about  one  time.  The  derangement  thus 
caused  in  the  business  of  our  country,  interwoven 
as  I  say  it  is  with  these  banks  as  its  fiscal  agency, 
would  be  utterly  destructive  of  the  condition  of 
•society  in  which  I  live.  Burst  these  connections, 
.and  you  carry  distress  up  the  sides  of  all  our 
mountains,  and  to  the  homes  of  all  our  farmers, 
w  ho  are  indorsers  for  their  sons  in  business;  you 
destroy  all  our  young  mechanics.  Indeed,  I  can¬ 
not  undertake  to  draw  a  picture  of  the  amount  of 
distress  and  ruin  that  would  follow  the  winding 
up  of  our  banks  of  New  England  all  ai,  one  time; 
and  I  think  I  may  say  about  the  same  of  New 
York  and  New  Jersey,  and  even  of  Ohio,  and  I 
think  perhaps  of  Michigan. 

Mr.  President,  this  is  no  slight  operation  for  us 
to  undergo.  Had  it  not  been  for  this  I  should  be 
content,  as  I  ordinarily  am,  to  let  the  Senate  take 
their  own  way.  I  am  not  in  the  habit  of  troubling 
them  much;  but  when  a  measure  of  this  kind  is 
pending,  involving  such  consequences, Icould  not 


do  my  duty  to  the  people,  whom  I  am  permitted 
in  some  degree  to  represent,  without  putting  in  my 
protestation  against  it.  I  have  felt  a  little  as  if  my 
duty  was  somewhat  like  that  of  Judah  when  he 
spoke  for  his  brother  Benjamin  in  Egypt.  He 
said,  in  substance,  “you  are  as  Pharaoh;  1  have 
brought  down  this  lad  here  at  your  direction;  my 
father’s  life  is  bound  up  in  the  boy, and  I  cannot 
return  to  my  father  without  him,  or  I  shall  bring 
down  his  gray  hairs  in  sorrow  to  the  grave;  there¬ 
fore  let  me  speak  a  word  in  my  lord’s  ear.”  It  is 
therefore  1  can  say  that  1  pray  thee  let  me  speak 
a  word  in  my  lord’s  ear.  If  my  speech  needs  any 
apology,  it  will  be  found  in  that. 

I  have,  Mr.  President,  given  an  outline  of  this 
plan.  It  is  simple,  brief,  clearly  capable  of  being 
understood  by  all  who  choose  to  devote  any  at¬ 
tention  to  it.  1  am  aware  that  in  times  of  national 
violence,  and  especially  of  domestic  violence,  we 
have  new  illustrations  of  the  principle  laid  down 
by  Montesquieu,  that  power  is  always  at  war  with 
its  own  boundaries;  it  is  always  restless  with  its 
own  limitations,  and  making  war  on  those  limit¬ 
ations;  and  we  are  constantly  inclined  to  the  ex¬ 
ercise  even  of  doubtful  powers  on  the  ground  of 
necessity  when  there  is  violence  against  us.  Go¬ 
ing  to  the  verge  of  power  is  the  present  tendency, 
perhaps  occasionally  overstepping  it.  It  is  in  that 
direction  that  we  need  caution.  Now,  would  it 
not  be  worth  while  to  stop  for  a  moment  and  in¬ 
quire  whether  we  really  have  the  power,  honestly 
exercising  our  functions,  candidly  construing  the 
Constitution,  to  do  this  great  thing — extinguish 
the  State  banks?  Have  we,  by  the  use  of  the 
power  of  taxation  to  raise  revenue,  openly,  avow¬ 
edly,  intentionally,  the  authority  to  pervert  that 
power  to  the  destruction  of  those  banks?  I  am 
sensible  that  I  am  speaking  in  a  time  when  any 
sort  of  doubt  about  power  is  received  as  somewhat 
dangerous  doctrine  any  way.  Still  1  would  say  a 
word  on  that  point. 

Mr.  President,  there  are  many  rights  and  pow¬ 
ers  which  the  States  have,  and  which  they  have 
the  right  to  exercise,  utterly  independent  of  the 
United  States  Government.  There  are  other  rights 
and  powers  which  they  may  exercise,  but  if  the 
United  States  exercises  power  over  that  thing  it 
supersedes  them.  There  are  other  powers  abso¬ 
lute  to  either  and  independentof  each  other.  There 
are  some  powers  forbidden  to  the  States.  To  il¬ 
lustrate  this:  the  State  has  the  power  of  taxation, 
and  that  power  is  an  unlimited  power;  and  it  may 
select  its  own  subjects  of  taxation.  It  is  unlim¬ 
ited  in  all  respects  but  one;  and  that  is,  that  they 
shall  not  lay  and  collect  duties  upon  importations. 
That  is  the  only  one  that  occurs  to  me  now.  In 
the  power  of  taxation  by  the  States  they  are  only 
limited  in  that,  that  they  shall  not  levy  and  collect 
duties  on  imports;  any  other  tax  they  may  collect. 
The  United  States  has  the  same  general  power  of 
taxation  in  the  country.  Now,  they  both  go  on, 
and  neither  of  them  can  have  any  check  upon  the 
other.  The  power  may  exist  in  a  State,  for  in¬ 
stance  like  that  to  make  a  State  bankrupt  law; 
and  that  would  be  well  enough;  but  when  the  Uni¬ 
ted  States  under  its  power  to  make  a  uniform  sys¬ 
tem  of  bankruptcy  exercises  that  power,  it  super¬ 
sedes  the  State  bankrupt  law;  because  otherwise 


5 


it  would  not  be  a  uniform  system.  But  whatever 
power  a  State  has,  and  which  it  does  not  hold  at 
the  will  of  Congress,  I  take  it,  cannot  bo  checked 
by  Congress  in  any  way;  and  so,  if  the  United 
States  lias  a  power  which  it  has  a  right  to  exer¬ 
cise  independent  of  State  action,  I  take  it  it  may 
exercise  it,  and  the  State  cannot  frustrate  it  in  any 
way;  and  this  is  just  as  true  of  one  as  the  other. 

Now,  Air.  President,  for  the  application  of  this 
argument.  The  Supreme  Court,  in  the  case  of 
McCullough  vs.  Alaryland,  decided  that  the  j 
United  States  had  the  right  to  make  a  United 
States  Bank,  with  branches  in  different  States, 
and  they  said  the  States  could  not  tax  that  United 
States  Bank.  Why?  Because  the  exercise  of  that 
power  in  the  extreme  would  destroy  it,  and  there¬ 
fore  you  would  make  it  out  that  Congress  had  the 
power  to  establish  a  bank;  but  after  all  it  was 
subject  to  the  power  of  the  States  to  put  it  down,  j 
In  the  case  of  Kentucky,  the  Supreme  Court  de¬ 
cided  that  the  long  continued  usage  in  this  coun¬ 
try  in  States  to  make  banks  v/as  constitutional, 
and  that  a  State  had  a  right  to  make  a  bank  of 
issue.  There  were  other  questions  in  that  case, 
which  it  is  not  necessary  now  to  bring  in  here. 

It  was  decided  that  a  State  had  tjie  right,  not  to 
make  a  bank  to  issue  the  State  paper,  but  a  bank 
to  issue  paper  currency. 

Now,  sir,  if  a  State  has  that  right,  it  has  that  | 
right  certainly  independent  of  the  consent  of  Con¬ 
gress.  Does  it  hold  it  at  the  will  of  Congress?  ; 
Certainly  not.  The  United  States,  in  making  a 
United  States  Bank,  held  it  independent  of  State  j 
action,  and  it  was  so  decided.  If  the  State  has  i 
this  right,  and  has  it  independent  of  the  consent  i 
of  Congress,  it  cannot  have  that  right  if  the  Uni¬ 
ted  States  can  tax  it  out  of  existence.  Hence,  I  say 
the  United  States  has  no  more  power  to  tax  a  State 
institution  out  of  existence  than  a  State  has  to  tax 
u  United  States  institution  out  of  existence.  1 
should  like  to  see  that  answered.  I  have  some-  l| 
times  proposed  that  question,  but  1  have  never 
received  any  answer  to  it.  In  most  of  the  Slates,  i 
the  State  of  New  York  for  instance,  almost  all  j 
their  banks  are  founded  upon  their  own  State  i 
stocks.  Itisapartof  their  financial  system  to 
make  their  stocks  valuable,  and  to  enable  them 
to  make  internal  improvements.  All  these  State 
banks  are  more  or  less  connected  with  and  rami¬ 
fied  in  with  the  business  of  their  several  States,  j 
Can  they  be  taxed  out  of  existence  by  the  United 
States?  Why,  sir,  you  might  just  as  well  tell  me  |i 
that  the  United  States,  under  the  power  of  tax¬ 
ation,  could  go  on  and  extinguish  all  the  schools 
in  New  England  by  taxing  its  schools,  its  col-  i 
leges,  and  its  academies,  and  their  books  and 
their  buildings  and  the  salaries  of  the  professors, 
and  in  that  way  destroy  them  under  the  very  gen¬ 
eral  principle  of  the  power  of  universal  taxation! 

I  shall  not  dwell  longer  upon  that  point.  I  have 
stated  my  view  upon  it. 

But,  Air.  President,  there  is  another  principle 
involved  in  this  measure;  and  I  am  looking  at  it  j 
now  in  its  great  national  aspects,  as  a  national  prin¬ 
ciple,  without  regard  to  the  time*.  1  say  it  is  to 
establish  corporations  in  all  the  States  and  Terri¬ 
tories  entirely  independent  of  any  power  of  vis¬ 
itation  by  those  Slates  or  Territories.  This,  to  I 


say  the  least  of  it,  is  an  extremely  questionable 
power.  What  may  be  the  number  oftlie.se  insti¬ 
tutions?  As  the  capital  is  to  be  §.'100,000,000, 
that  will  make  three  thousand  banks  of  §100,000 
each;  and  the  bill  provides  that  they  may  be  made 
§50,000  banks,  which  will  make  six  thousand 
§50,000  banks.  I  believe  we  have  now,  in  what 
are  called  the  loyal  States,  between  thirteen  and 
fourteen  hundred  banks  altogether,  and  this  bill 
proposes  to  make  at  least  three  thousand,  or  per¬ 
haps  six  thousand,  of  these  bank  corporations, 
established  all  over  the  States. 

That  is  not  all.  It  is  proposed  that  there  shall 
be  no  other  banks  but  these;  the  whole  banking 
capital  is  to  be  put  into  these  banks;  and  the  whole' 
of  that  property  is  removed  from  all  State  taxa¬ 
tion.  1  ask  gentlemen  to  reflect  on  what  will  be 
the  effect  in  their  different  States  of  closing  up  the 
present  banks,  and  taking  the  capital  belonging 
to  the  stockholders,  putting  it  into  the  banks  un¬ 
der  this  bill,  and  removing  the  whole  of  it  from 
all  the  forms  of  State  taxation — State,  county, 
city,  and  town.  Alany  of  our  States  derive  their 
school  fund  from  what  they  obtain  from  these 
State  banks.  I  believe  it  is  so  in  New  Hamp¬ 
shire.  They  have  their  school  fund  in  that  way. 

Air.  CLARK.  Yes,  sir:  the  only  school  fund 
we  have. 

Air.  COLL AMER.  The  whole  school  fund  of 
the  State  of  New  Hampshire  is  what  they  derive 
from  these  banks. 

Air.  CLARK.  And  we  raise  a  tax  from  them 
in  each  town  besides. 

Mr.  COLLAA1ER.  That  is  forlocal  taxation. 
The  only  State  fund  they  have  for  schools  is  de¬ 
rived  from  the  banks.  I  believe  in  the  State  of 
Connecticut  they  have  a  large  school  fund,  the 
greater  portion  of  which  is  in  these  very  stock*' 
in  these  banks,  and  if  you  wind  up  the  bank» 
they  can  derive  no  more  income  from  them. 

I  cannot  go  into  all  the  particulars  on  this  sub¬ 
ject;  but  l  just  mention  this  that  gentlemen  may 
reflect  for  a  little  while  on  what  will  be  the  effeca 
of  this  measure  on  society  and  the  various  insti¬ 
tutions  of  the  community  connected  with  thews, 
banks.  There  is  manifest  injustice  in  allowing 
moneyed  men,  who  have  some  money  to  spare* 
to  put  it  into  these  banks,  and  thus  keep  it  out  of 
the  way  of  State  taxation  altogether. 

Air.  SHERMAN.  If  it  will  not  interrupt  my 
honorable  friend,  I  will  ask  if  we  do  not  go  through 
the  same  process  by  issuing  bonds  of  the  United 
States  which  are  exempt  from  taxation  ?  Th® 
same  process  is  gone  through  there  that  is  gon® 
through  under  this  bill.  The  banks  invest  in  theao 
bonds  instead  of  individuals  purchasing  the  bonds. 

Air.  COLLAMER.  That  does  not  relieve  th® 
subject  of  taxation  within  the  State,  nor  equalise 
it  in  any  degree  by  taking  the  money  out  of  th* 
present  State  banks,  where  it  is  taxed  in  the  State* 
as  the  property  of  the  stockholder  or  director  i« 
the  bank, extinguishing  that  property  and  taking 
the  money  to  buy  United  States  stocks  which  are 
not  subject  to  taxation.  Our  people  are  never 
going  to  buy  United  States  stocks  in  this  way  to 
make  any  permanent  investment  upon.  If  they 
had  their  bank  money  back  in  their  own  hands, 
they  would  lend  it  and  loon  it  out  wherever  they 


6 


could  in  their  own  neighborhoods.  If  the  gentle¬ 
man  will  hear  me  through,  as  extravagant  as  he 
may  think  my  views  are,  he  will  be  enabled  to 
.give  me  some  credit  for  consistency.  He  will  find 
that  the  people  will  not  break  up  their  present 
system  of  banking,  interwoven,  as  it  is,  with  all 
their  transactions,  bound  upas  their  business  life 
is  with  it,  to  establish  banks  under  this  bill,  and 
they  will  never  buy  United  States  stocks  for  this 
purpose. 

The  next  point  to  which  I  desire  to  call  atten¬ 
tion  is  the  propriety  of  our  undertaking  as  a  na¬ 
tion  to  say  that  we  will  be  responsible  for  the  ul¬ 
timate  redemption  of  these  bills  by  the  securities 
that  are  deposited.  I  am  aware  that  the  honor¬ 
able  Senator  who  is  the  parent  of  the  bill  here 
thinks  he  has  got  in  it  something  very  valuable, 
in  the  provision  about  the  liability  of  individual 
fltockholders,  and  requiring  twenty-five  per  cent, 
of  the  amount  of  their  circulation  to  be  kept  on 
hand.  All  these  things,  to  my  mind,  are  hardly 
worth  the  paper  on  which  they  are  written;  they 
are  good  for  nothing  at  all.  How  can  you  fol¬ 
low  the  responsibility  of  stockholders?  The  very 
stocks  are  assignable;  they  are  personal  property. 
They  are  bought  and  sold  in  the  market  every 
•day  for  more  or  less,  according  to  their  worth.  Al¬ 
though  one  of  these  banks  may  start  with  some 
very  responsible  men  when  it  first  sets  up,  the 
moment  it  becomes  at  all  doubtful  or  troublesome 
it  quickly  passes  off  into  the  hands  of  men  who 
:have  no  responsibility.  You  can  never  pursue  it 
in  that  way.  As  to  the  provision  that  they  shall 
retain  twenty-five  per  cent,  on  their  circulation  on 
hand,  that  is  their  own  money;  it  is  not  United 
States  money.  The  effect  is  just  this:  whenever 
your  bonds  that  you  hold  for  your  security  to  re¬ 
deem  these  bills  depreciate  essentially,  the  bank 
will  wind  up,  and  they  will  doit  without  any  sort 
of  disparagement  or  any  dishonesty.  The  stock¬ 
holders  will  say  at  once  to  themselves,  “  we  have 
noticed  the  fall  of  these  stocks;  we  know  they  are 
very  much  down;  we  will  not  redeem  any  more 
of  these  bills;  we  will  leave  them  to  be  redeemed 
by  the  Government;  we  gave  them  $100,000  and 
deposited  it  with  them  in  bonds;  they  only  al¬ 
lowed  us  $90,000;  that  is  all  we  have  had  of  them ; 
we  leave  these  notes  in  their  hands  to  redeem;  we 
will  let  them  redeem  them;  we  gave  them  a  great 
deal  more  than  they  ever  gave  us,  and  let  them 
redeem  them.  ”  When  would  that  occur  ?  Why, 
sir,  in  great  national  calamities  such  as  those  un¬ 
der  which  we  already  suffer  by  the  unfortunate 
proceedings  of  this  war,  we  know  that  public 
etocks  rise  and  fall  with  the  prosperity  or  decline 
of  the  nation. 

Again,  I  will  take  the  very  reverse  of  this  state 
of  things.  Suppose  we  should  close  this  unfor¬ 
tunate  controversy  and  return  to  peace.  The 
moment  you  are  at  peace  every  man  wants  all 
the  money  he  has  got  to  go  into  business.  He 
has  lent  it  to  the  United  States,  taken  this,  that, 
or  the  other  sort  of  stock  in  order  to  have  it  earn 
something  while  this  public  controversy  and  diffi¬ 
culty  was  going  on.  The  moment  that  is  ended 
he  wants  his  money  to  go  into  business  again  in 
our  cities  and  towns — importing  and  the  like.  He 
immediately  cashes  tiiese  bonds,  and  a  very  large 


portion  of  these  bonds  will  at  once  be  thrown  or? 
the  market  at  a  discount  the  moment  you  are  at 
peace.  In  either  of  these  cases,  whether  from 
public  calamity  or  from  peace,  there  comes  a  de¬ 
terioration  upon  the  value  of  these  bonds;  these 
banks  are  wound  up,  the  bills  are  protested  and 
presented  to  the  Treasury  here  in  bundles  for  pay¬ 
ment.  What  will  you  do  ?  It  is  said  in  the  bill 
that  they  are  to  be  paid  here.  You  may  take  the 
stocks  the  bank  left  as  security  and  go  and  sell 
them  in  the  market,  and  thus  get  money  to  pay 
them.  If  they  have  deteriorated  so  much  that  the 
banks  do  not  want  to  pay  their  bills,  it  will  be  a 
pretty  hard  bargain  for  us  to  pay  them  with  those 
bonds.  We  should  have  to  sell  at  as  much  dis¬ 
count  as  they.  Besides,  we  do  not  get  rid  of  any¬ 
thing  in  that  way.  We  have  to  anticipate  our 
bonds.  They  run  twenty  years.  We  have  got 
to  pay  these  notes  when  they  are  presented;  and 
if  we  sell  our  bonds  at  a  discount  in  the  market  to 
get  some  money  to  redeem  them  with,  we  have 
got  to  meet  that  bond  in  the  end,  have  we  not? 
We  do  not  get  rid  of  it  at  all;  but  we  are  compelled 
to  get  the  money  about  twenty  years  before  it  is 
due.  I  do  not  see  the  policy,  the  expediency,  or 
the  profit  of  such  a  bargain. 

The  next  aspect  to  which  I  will  call  attention  is 
this:  we  once  had,  or  twice  had,  a  United  States 
Bank.  The  history  of  the  last  one  is  within  the 
recollection  of  most  of  those  who  hear  me.  That 
bank  had  a  capital  of  $35,000,000.  The  proposi¬ 
tion  now  is  to.make  United  States  banks  with  a 
capital  of  $300,000,000.  The  United  States  took 
$7,000,000  of  that  stock.  They  paid  nothing  in, 
but  put  in  their  stock  for  it  on  time.  They  had 
directors  of  their  own  appointed  to  keep  watch  of 
that  bank.  They  had  the  right  to  borrow  money 
at  that  bank.  The  bank  was  bound  to  loan  it  to 
them  at  a  certain  rate  and  limitation.  They  went 
on  with  that  bank  during  the  whole  period  of  its 
existence.  They  took  their  dividends  from  year 
to  year  by  extinguishing  the  payment  of  interest 
on  their  bonds;  and  at  the  close  of  the  whole  they 
received  back  their  stock  and  ten  per  cent,  upon 
it  of  accumulated  profits  that  had  not  been  divided. 
Everybody  concerned  in  it  was  paid;  the  stock 
was  paid  back;  and  the  United  States  made  that 
money. 

Now,  sir,  why  did  that  institution  go  down ;  or 
rather,  why  was  it  not  renewed  and  enlarged  and 
adapted  to  the  condition  of  the  country?  It  was 
because  it  was  said  to  be  a  dangerous  political  en¬ 
gine  in  the  hands  of  whatever  political  party  ex¬ 
isted  at  the  time;  that  it  would  be  used  as  a  great 
machine  in  the  different  States  by  the  favor  which 
theGovernment wouldgiveit,orthe  control  which 
they  would  exercise  over  it;  and  it  v/as  dangerous 
as  it  was  said  then,  and  I  think  it  was  demonstra¬ 
ble. 

Mr.  President,  look  at  the  proposition  now  be¬ 
fore  us  in  this  aspect.  It  provides  that  the  Sec¬ 
retary  of  the  Treasury  shall  nominate  this  Comp¬ 
troller  of  the  Currency.  He  can  be  appointed  by 
the  President  only  on  the  nomination  of  the  Sec¬ 
retary  of  the  Treasury;  and  he  is  given  any  num¬ 
ber  (not  limited  at  all)  of  clerks  and  agents.  There 
are  established,  if  you  please,  three  thousand  of 
these  banks  under  this  bill  of  $100,000 each,  scat- 


7 


tered  through  all  the  country.  They  can  be  visited 
by  agents  appointed  here  under  this  bill,  and  in¬ 
spected  from  time  to  time  and  reported  upon .  The 
Secretary  is  authorized  to  make  such  of  them  as 
he  thinks  proper  depositories  of  the  public  revenue, 
and  he  is  to  distribute  this  stock,  one  half  of  the 
$300,000,000  to  the  different  States,  according  to 
their  representative  population,  and  the  other  half 
according  to  the  banking  resources  of  the  country ; 
there  is  no  limitation  upon  him  whatever.  If  the 
old  United  States  Bank  furnished  well-grounded 
apprehensions  of  its  dangerous  political  tendency 
as  a  political  agency,  permit  me  to  ask  gentlemen 
to  reflect  for  a  moment  on  what  you  have  got 
here,,  with  $300,000,000  of  capital,  with  three 
thousand  banks  subject  to  inspection,  and  to  be 
troubled,  just  as  much  as  the  head  of  the  Treasury 
Department  pleases,  if  they  do  not  support  his 
views;  or  to  receive  favors  by  way  of  being  made 
depositories  for  the  public  dues;  and  the  Secretary 
having  the  power  to  appoint  agents  and  clerks  ad 
libitum.  I  do  not  wish  to  enlarge  upon  this  point 
at  all,  but  I  say  this:  if  a  Secretary  of  the  Treasury 
can  be  furnished  with  these  powers  and  chooses  to 
use  them,  he  must  be  a  very  bungling  politician 
if  he  cannot  make  himself  President  any  day. 

Mr.  President,  in  the  outset  of  our  present  na¬ 
tional  difficulties  I  had  occasion,  with  some  others, 
to  have  a  conference  with  the  Secretary  of  the 
Treasury  about  the  public  funds,  bonds,  &c.  I 
suppose  we  then  understood,  as  it  has  been  un¬ 
derstood  always,  that  no  nation  is  expected  to  pay 
the  expenses  of  a  war  while  that  war  continues; 
it  is  not  expected  by  the  world;  but  that  if  a  coun¬ 
try  raises  taxes  from  year  to  year  to  meet  its 
ordinary  expenses  and  to  pay  the  interest  on  its 
loans,  it  can  always  obtain  a  loan.  Have  we  not 
done  that?  Will  not  the  amountof  our  duties  on 
imports  and  our  income  from  the  internal  revenue 
duties,  which,  it  is  said,  will  amount  to  something 
like  $150,000,000,  pay  our  ordinary  expenses,  and 
pay  not  only  the  interest  on  $1,000,000,000,  but 
twice  $1,000,000,000?  If  you  have  a  debt  of 
$1,000,000,000,  $60,000,000  will  pay  the  interest 
of  it  at  six  per  cent.;  $120,000,000  would  pay  the 
interest  of  it,  if,  instead  of  $1,000,000,000,  it  were 
$2,000,000,000.  We  raise  enough  to  pay  it,  and 
pay  it  in  gold.  Have  our  stocks  been  sold  at  a 
discount?  Not  at  all.  The  gentleman  from  Ohio 
read  to  us  here  to  what  extreme  depreciation  the 
public  stocks  of  England  and  France  went  in  a 
period  of  distress.  Have  we  suffered  any  sacri¬ 
fice  of  that  sort?  Not  at  all.  The  view  then  enter¬ 
tained  by  us  at  that  conference  has  been  realized. 

The  mode  of  raising  money  by  loan  during  war 
is  either  by  long  loans  upon  bonds,  as  they  are 
called,  on  interest,  or  by  furnishing  a  circulating 
medium  to  the  people  in  the  form  of  Treasury 
notes.  That  is  a  loan  without  interest;  the  other 
is  a  loan  with  interest.  That  is  the  only  differ¬ 
ence  between  them.  But  in  relation  to  the  loan 
without  interest,  that  is,  circulating  money,  there 
must  be  a  large  measure  of  caution;  for  if  you  put 
out  any  too  much,  there  will  be  a  period  of  de¬ 
preciation  and  distress  followiyg;  and  therefore 
it  requires  great  caution.  At  the  lime  they  were 
issued,  I  entertained  the  opinion  that  we  had  no 
right  to  make  them  a  legal  tender  for  debts.  I 


thought  so  then,  and  I  think  so  now;  but  I  was 
voted  down,  and  it  remains  a  question  for  the 
courts  to  decide.  1  have  no  more  to  say  about 
that  subject.  I  leave  that  question  to  the  courts. 
But  because  you  can  send  it  out  cheaply,  and  be¬ 
cause  you  have  no  interest  to  payupon  it, any  pres¬ 
sure  for  the  need  of  some  money  is  very  likely  to 
tempt  us  to  put  it  out.  I  said  at  the  time  we  autho¬ 
rized  them  that  the  apprehension  of  danger  would 
be  from  extending  and  extending  the  issue  as  de¬ 
mands  arose.  1  was  reconciled  in  a  great  meas¬ 
ure  to  the  circulation  of  these  Treasury  notes  as 
a  currency  from  this  view:  we  inserted  a  pro¬ 
vision  that  the  holders  might  at  any  time  fund 
them  at  the  Treasury  for  twenty  years  six  per 
cent,  bonds.  It  seemed  to  me  that  if  there  was 
any  depreciation  of  them  in  the  market,  you 
would  find  the  people  funding  them.  It  was  a  sort 
of  safety-valve,  a  barometer  to  ascertain  when 
there  was  a  tendency  to  depreciate,  for  then  they 
would  run  off  into  bonds.  The  Secretary  says  he 
has  found  much  difficulty  in  relation  to  those 
4onds.  He  cannot  get  anything  of  an  advance 
for  them,  because  anybody  can  take  them  with 
these  greenbacks  as  you  call  them  at  par  at  the 
Treasury  at  any  time;  and  he  is  very  desirous  of 
getting  rid  of  that  provision.  The  finance  bill  on 
our  table  contains  a  provision  for  that;  that  is, 
fixing  a  time  within  which  they  shall  be  funded, 
and  prohibiting  it  after  that  time.  I  do  not  ob¬ 
ject  to  that  particularly ;  though  when  it  is  adopt¬ 
ed  we  lose  this  safety-valve.  However,  we?  se¬ 
cure  other  advantages,  and  a  chance  to  negotiate 
that  paper  in  the  market  for  some  advancement. 

We  have  relieved  the  Secretary  of  any  trouble 
on  that  score.  All  the  danger  now  is  that  you 
may  issue  too  many  of  these  bills.  How  are  you 
to  ascertain  when  they  depreciate?  for,  when  they 
do,  you  should  stop.  The  Secretary  labors  at 
length  in  his  report  to  show  that  they  have  not 
depreciated.  I  agree  to  that.  There  has  been 
no  redundancy  of  circulation  at  all,  and  there  is 
none  now.  What,  then,  is  the  cause  of  apprehen¬ 
sion  ?  Why  the  necessity  to  resort  to  new  schemes 
to  get  along*  We  have  need  of  them  for  circula¬ 
tion;  and  I  take  it  we  will  take  care  they  do  not 
go  too  far.  It  is  due  from  us  to  the  country  that 
they  shall  not  be  allowed  to  go  too  far  and  be  too 
numerous.  As  we  can  raise  enough  by  taxes  to 
pay  the  interest  on  the  loans,  I  have  no  appre¬ 
hension  on  that  subject  at  all. 

We  have  issued  say  about  two  hundred  and 
fifty  million  dollars  of  these  notes,  besides  a  hun¬ 
dred  and  fifty  or  a  hundred  and  sixty  millions  of 
bank  circulation.  It  is  said  it  has  not  depreci¬ 
ated;  that  we  could  not  find  enough  of  it  lately  to 
make  a  loan  in  New  York.  Where  has  it  gone, 
and  what  has  become  of  it?  If  gentlemen  will 
reflect,  in  the  first  place  they  will  remember  the 
whole  of  the  specie  circulation  has  been  taken 
up.  All  that  had  to  be  filled  in  the  current  of  cir¬ 
culation  with  this  paper.  In  the  next  place,  we 
had  a  large  amount — more  than  gentlemen  not 
acquainted  with  that  locality  would  imagine — of 
Canadian  circulation  extending  along  our  whole 
frontier  far  off  into  the  West,  into  Michigan,  and 
1  believe  clear  off  to  the  Mississippi  river.  The 
moment  this  war  came  on  that  was  cashed  on  pre- 


8 


sentation,  and  was  carried  home  and  disappeared. 
That  amount  of  currency  had  to  be  supplied. 
Then,  again,  a  large  body  of  western  banks, 
founded  on  southern  stocks,  went  down  when  this 
rebellion  took  place,  and  all  that  currency  went  out 
of  existence,  and  had  to  be  supplied.  I  can  easily 
see  that  this,  together  with  the  very  large  demand 
for  the  use  of  money  in  moving  this  large  body 
of  provisions,  paying  large  bodies  of  troops,  mak¬ 
ing  large  contracts  for  all  Army  supplies,  requires 
the  use  of  a  much  extended  amount  of  circulation. 
Instead  of  having,  with  what  we  have  put  out, 
and  with  what  the  banks  have  put  out,  any  re¬ 
dundancy,  there  is  a  demand  in  the  market,  and 
no  depreciation  has  happened,  as  evidenced  by 
any  increase  of  prices. 

I  now  wish  to  call  attention  to  this  scheme  as 
compared  with  the  one  we  have  in  operation  at 
present.  We  put  out  our  circulation,  and  it  takes 
its  circulation,  I  suppose,  without  much  expense, 
if  you  will  put  it  into  the  currents  of  commerce 
it  will  go  West,  drift  off  by  its  own  wind,  I  take 
it,  wherever  it  is  needed.  It  needs  no  expense  of 
the  Government  to  do  that,  if  you  but  put  it  out. 
It  circulates  and  answers  to  the  people  the  pur¬ 
poses  of  circulation  at  present;  and  it  costs  com¬ 
paratively  nothing  to  the  Government,  merely  the 
cost  of  striking  it  off.  Now,  what  do  you  pro¬ 
pose  to  do  in  lien  of  it?  To  induce  people  to  take 
$300,000,000  of  stock  on  interest,  set  up  these 
banks,  put  out  their  circulation  as  a  national  cur¬ 
rency,  and  we  guaranty  its  payment.  Wherein 
is  that  any  better  than  the  paper  we  have  got  out 
now?  I  will  ask  gentlemen  to  put  that  question 
to  themselves.  Is  it  any  better?  What  is  it 
founded  on  ?  United  States  credit,  United  States 
stocks.  Whom  do  the  bill-holders  look  to  for 
final  redemption?  The  United  States  Treasury. 
We  say  we  will  redeem  them.  The  system  has 
no  other  foundation.  All  these  fictitious  contriv¬ 
ances  about  the  responsibility  of  the  individual 
stockholders  amount  to  just  nothing  at  all.  As 
to  the  provision  retaining  twenty-five  percent,  of 
their  circulation,  they  can  put  that  in  their  own 
pockets  whenever  they  please,  and  there  is  no¬ 
body  to  question  them  about  it.  It  is  simply  and 
■singly  founded  upon  the  public  responsibility; 
and  indeed  the  honorable  Senator  from  Ohio  claims 
that  to  be  its  great  feature  of  excellence. 

Mr.  SHERMAN.  Does  the  Senator  want  an 
answer  to  his  question?  If  he  does,  I  will  answer 
it  the  best  way  I  can. 

Mr.  COLLAMER.  I  did  not  ask  for  an  an¬ 
swer  now.  The  answer  might  be  as  long  as  his 
speech.  I  am  not  asking  the  Senator  any  ques¬ 
tions.  When  I  do,  I  will  await  his  answer. 

Mr.  SHERMAN.  The  Senator  need  not  make 
any  remark  about  it,  for  I  understood  him  dis¬ 
tinctly  to  ask  a  question.  He  looked  at  me  and 
propounded  a  question.  Of  course  I  do  not  wish 
to  answer  it  now. 

Mr.  COLLAMER.  I  did  not  put  a  question. 
It  is  true  I  did  look  at  the  Senator.  If  that  is 
offensive  I  will  not  look  at  him  again. 

Mr.  SHERMAN.  I  understood  him  to  put  a 
question  distinctly. 

Mr.  COLLAMER.  No;  I  put  no  question. 
The  honorable  Senator  claimed  the  fact  that  this 


paper  rested  on  our  public  credit  as  its  great  vir¬ 
tue,  as  its  great  excellence.  Very  well;  let  it  be 
so.  I  have  no  objection  to  it.  I  was  not  going  to 
answer  that,  nor  to  controvert  it  in  any  way.  But 
does  not  your  present  circulation  rest  on  the  same 
basis  precisely  ?  Then,  putting  it  in  plain  English, 
you  propose  to  hire  these  people  to  go  into  these 
associations,  take  these  bonds  and  deposit  them. 
They  are  to  pay  two  percent,  on  their  circulation, 
and  you  pay  them  six  on  their  bonds.  I  will  call 
it  four  per  cent.;  though  it  is  more,  as  the  gentle¬ 
man  knows,  because  the  two  per  cent,  they  pay' 
in  currency  and  the  six  percent,  we  pay  in  gold. 
The  amount  of  it  is  this:  we  say  to  them,  “  if  you 
will  do  this  to  the  amount  of  $300,000,000,  and 
put  out  notes  to  the  extent  of  ninety  per  cent,  of 
the  bonds,  we  will  pay  you  $12,000,000  in  gold 
every  year  for  doing  it.”  You  may  talk  about 
its  being  in  the  form  of  bonds,  but  that  does  not 
alter  it  at  all.  We  are  to  enter  into  that  arrange¬ 
ment  with  them.  If  they  take  their  money,  buy 
these  bonds,  put  them  on  deposit,  issue  paper  to 
the  extent  of  ninety  per  cent,  of  those  bonds  and 
circulate  it,  and  pay  two  per  cent,  on  that  circu¬ 
lation,  we  pay  them  six  on  the  bonds;  that  is,  we 
pay  them  four  per  cent,  on  the  bonds,  if  they  will 
do  us  this  great  service  !  There  is  all  there  is 
about  it.  You  may  discuss  it  as  you  please  and  use 
a  great  many  financial  expressions  and  schemes; 
but  that  is  the  English  of  it;  that  is  the  simple 
common  sense  of  it.  Instead  of  circulating  that 
amount  of  our  own  currency  upon  our  own  re¬ 
sponsibility  and  paying  nothing,  we  are  to  hire 
them  to  circulate  that  amount  of  our  currency, 
and  pay  them  $12,000,000  a  year  in  gold  for  doing 
it;  and  we  are  to  be  responsible  after  all.  That 
is  all  there  is  of  it.  Yankee  as  1  am,  I  am  una¬ 
ble  to  perceive  how  it  is  possible  that  that  can  be  a 
good  trade  for  us,  or  how  any  shrewd  man  would 
ever  think  of  entering  into  an  agreement  of  that 
kind. 

Mr.  President,  this  measure  looks  to  me,  and 
I  am  suspicious  it  will  look  to  the  moneyed  world, 
like  an  acknowledgment  of  a  terrible  desperation 
in  the  financial  affairs  of  this  country,  which  we 
disclose  by  offering  to  make  such  a  provision  as 
this.  It  is  conceding  to  the  world  that  we  have 
become  perfectly  desperate;  that  we  will  hire  these 
banks  to  circulate  these  bills,  and  guaranty  the 
payment  of  them,  which  are  in  fact  no  more  nor 
less  than  our  bills,  and  pay  them  $12,000,000  a 
year  for  doing  it;  whereas,  if  we  were  to  circulate 
our  own  bills,  it  would  cost  us  nothing.  I  am 
unwilling  to  make  such  an  acknowledgment  of 
desperation  as  that  to  the  world. 

But  it  is  said  the  State  banks  increase  their  cir¬ 
culation  unreasonably,  and,  it  is  thought,  some¬ 
times  dangerously.  The  Secretary  says  that 
they  have  increased  during  the  last  year  about 
$30,000,000;  from  something  over  $130,000,000 
to  something  over  $160,000,000.  1  can  say  of  the 
banks  of  New  England  that  no  man  can  suppose 
any  great  increase  can  take  place  there,  as  their 
circulation  has  to  be  redeemed  in  Boston  and  in 
New  York,  and  in  exchange,  every  day.  It  has 
to  be  redeemed  every  day  through  the  Suffolk 
Bank,  the  Bank  of  Mutual  Redemption,  the  Me¬ 
tropolitan  Bank,  and  at  the  Clearing  House,  and 


I 


when  any  hank  gets  out  an  amount  beyond  its 
responsibility,  it  is  known  in  twenty-four  hours, 
and  its  bills  are  thrown  out. 

The  reason  of  this  extended  increase  of  currency 
by  the  banks  was  the  demand  for  it,  arising  from 
what  I  have  already  stated,  the  withdrawing  of 
the  circulation  money ,  the  breaking  up  of  the  west¬ 
ern  banks.  Our  own  banks  in  Vermont  even  were 
called  upon  for  large  sums  of  money.  A  single 
bank  I  knew  lent  $200,000  or  $300,000  for  the  pur¬ 
pose  of  enabling  a  man  to  go  west  to  purchase  wool 
throughout  the  West  to  bring  to  market.  A  large 
portion  of  that  money  has  not  come  back,  from 
last  summer  to  this  time.  The  reason  is  that  they 
needed  the  money  in  the  West  for  circulation,  and 
they  have  kept  it  there  for  their  business  in  conse¬ 
quence  of  the  breaking  down  of  their  banks.  No 
blame  can  be  attached  to  the  banks  for  that.  But 
if  there  is  danger  of  that,  if  there  is  any  apprehen¬ 
sion  of  an  artificial  increase  of  that  kind,  take  the 
House  bill  as  they  have  sent  it  to  us,  that  puts  a 
tax  on  all  banks  that  circulate  beyond  a  certain 
amount,  proportionate  to  their  capital.  That  may 
be  a  proper  check.  I  do  not  say  that  it  is  not. 
That  which  yon  can  cure  and  stop,  you,  it  seems, 
will  not  cure  and  stop,  but  will  make  a  topic  to 
use  for  another  purpose,  for  destroying  the  banks 
altogether.  That  would  hardly  seetn  to  be  proper. 

Some  words  have  been  said  about  their  taking 
these  United  States  notes  and  banking  on  them. 
What  hurt  does  that  do?  No  bank  ever  issues 
or  deposits  more  than  the  amount  of  them,  never 
quite  that.  If  they  keep  the  United  States  notes 
in  their  vaults,  it  leaves  so  much  more  room  for 
the  circulation  of  more  of  them.  Is  anybody 
injured  by  that?  The  truth  is,  Mr.  President, 
the  fact  that  the  banks  have  issued  and  cannot 
get  back  their  circulation  at  this  time  is  evidence 
of  what?  That  there  is  a  redundancy  of  the  cur¬ 
rency  and  a  fear  of  depreciation?  It  is  directly 
the  other  way.  It  is  evidence  there  is  no  redun¬ 
dancy,  and  the  reason  they  cannot  get  it  back 
is  it  is  wanted,  it  is  needed  in  circulation. 

It  is  said  that  after  all  the  great  object  to  be  ef¬ 
fected  is  a  uniform  currency.  Well  now,  Mr. 
President,  the  idea  of  makinga  uniform  currency 
by  force  of  law  is  utterly  impracticable.  You 
might  just  as  well  make  a  lav/  to  regulate  the  cir¬ 
culation  of  blood  in  the  human  system.  You 
have  a  most  explicit  law  that  a  certain  weight  of 
gold  stamped  in  a  certain  way  shall  positively  be 
here  in  the  United  States  ten  dollars.  You  have 
another  law  that  a  piece  of  paper  stamped  so  and 
so,  and  saying  thus  and  so,  shall  be  ten  dollars 
lawful  money,  a  legal  tender.  Have  you  not  by 
law  made  them  exactly  alike  os  far  a3  human  laws 
can?  Yes.  Are  they  alike  ?  Are  they  ofthesame 
value?  The  laws  of  commerce  and  the  laws  of 
pecuniary  circulation  are  utterly  beyond  4human 
legislation. 

And  here,  Mr.  President,  I  cannot  but  call  at¬ 
tention  for  a  moment  to  the  extraordinary  manner, 
as  it  seems  to  me,  in  which  gentlemen,  when  they 
get  a  favorite  idea  and  theory,  having  plausibility 
with  them,  soon  become  what  is  called  one-ideaed ; 
it  is  a  hobby,  und  everything  gives  way  to  it,  and 
they  can  see  in  cverythingevidence  to  themselves 
of  its  correctness.  The  honorable  Senator  from 


I 

I 


Ohio,  before  this  bill  came  before  us  at  all,  and  to 
prepare  the  way  for  it,  as  “coming  events  cast 
their  shadow's  before,”  some  time  since  made  us 
a  great  speech  against  banks  and  bank  circula¬ 
tion;  and  the  great  burden  of  it  was,  the  inequal¬ 
ity  of  that  circulation  because  it  wrould  not  go 
everywhere;  and,  among  other  things,  he  cited,  as 
an  authority  for  him  to  make  a  uniform  paper  cur¬ 
rency- — for  that  is  what  we  are  at — the  argument 
of  Mr.  Webster  upon  the  reestablishment  of  the 
old  national  bank. 

Did  Mr.  Webster,  and  those  men  who  acted 
with  him,  when  they  wanted  to  make  a  uniform 
currency,  by  means  of  that  United  States  Bank, 
everywhere  current  and  receivable  for  public  dues, 
undertake  to  say  that  they  would  make  that  out 
of  a  paper  currency  in  any  other  way  than  by 
having  it  convertible  on  demand  into  specie? 
Never.  What  is  wanted  now  is  that  we  should 
establish  a  system  and  make  a  national  currency 
irredeemable  in  specie;  and  the  honorable  Senator 
quoted — and  I  read  from  his  quotation — from  Mr. 
Webster,  a  few  words.  Mr.  Webster  said: 

“A  sound  currency  is  an  essential  and  indispensable 
security  for  the  fruits  of  indu-try  and  honest  enterprise. 
Every  man  of  property  or  industry,  every  man  who  desires 
to  preserve  what  he  honestly  possesses,  or  to  obtain  what 
he  can>honest!y  earn,  has  a  direct  interest  in  maintaining 
a  safe  circulating  medium  ;  such  a  medium  as  shall  he  a 
real  and  substantial  representative  of  property,  not  liable  to 
vibrate  with  opinions,  not  subject  to  he  blown  up  or  blown 
down  by  the  breath  of  speculation,  hut  made  stable  and 
secure  by  its  immediate  relation  to  that  which  the  whole 
world  regards  as  of  a  permanent  value.” 

That  is  it.  The  right  of  being  at  once  trans¬ 
ferred  into  specie  on  demand  was  alone  the  basis 
on  which  it  could  be  made  good.  After  other  elo¬ 
quent  remarks,  Mr.  Webster  said: 

“  Our  own  history  has  recorded  for  our  instruction 
enough,  and  more  than  enough,  of  the  demoralizing  tend¬ 
ency,  the  injustice,  and  the  intolerable  oppression  on  the 
virtuous  and  well-disposed,  of  a  degraded  paper  currency, 
authorized  by  law,  or  in  any  way  countenanced  by  Govern 
ment.” 

That  is  it.  Paper  not  redeemable  in  specie,  and 
authorized  by  law,  was  what  he  opposed.  No 
words  could  to  my  mind  be  more  in  condemnation 
of  the  proposed  system  than  these,  instead  of  being 
in  support  of  it,  as  they  are  quoted. 

The  next  question  is,  Mr.  President,  suppose 
these  banks  were  established,  would  that  make  a 
uniform  currency  ?  You  agree  to  receive  their  pa¬ 
per  for  public  dues  and  pay  it  out;  but  does  that 
make  it  uniform  ?  It  has  to  be  carried  to  the  hank 
that  issued  it,  and  there  pay  is  to  be  demanded  on 
it  before  you  can  present  it  to  the  Treasury  for 
payment.  It  is  as  much  exclusively  a  local  paper 
as  that  is  which  is  issued  from  the  banks  now. 
Gentlemen  say  that  the  people  can  pay  internal  du¬ 
ties  with  it.  When  a  quantity  of  money  is  wanted 
to  be  transferred  from  West  to  East  or  East  to 
West,  will  the  notes  ofthese  local  banks,  for  they 
are  really  nothing  more  than  that,  go  current  be¬ 
cause  a  man,  if  he  has  some  of  them,  may  pul  the 
mnstexceptionable  and  the  most  distant  ones  aside 
in  his  pocket  once  in  a  year,  to  pay  his  taxes  with  ? 
Does  that  make  them  all  alike?  Not  at  all,  sir. 
They  must  pass  in  the  currency  of  commercial 
life,  and  they  will  be  precisely  as  bank  issues  now 
are.  li  may  be  said  that  they  will  be  more  cred 
italde,  because  of  the  responsibility  of  the  Go*- 


r 


ernment;  but  as  to  their  uniformity  as  currency, 
it  will  not  be  accomplished  at  all;  they  are  noth¬ 
ing  like  equal  in  that  respect  to  your  present  green¬ 
backs.  The  United  States  notes  which  we  issue 
now  will  pass  anywhere  and  for  anything,  as  well 
one  thing  as  another,  and  are  a  great  deal  more 
uniform  currency  than  these  bank  notes  can  be. 

There  is  another  thing  observable  in  this  mat¬ 
ter.  When  our  predecessors  were  making  the 
United  States  Bank,  and  meant  to  make  its  paper 
current  everywhere  because  convertible  into  spe¬ 
cie,  did  they  undertake  to  make  that  uniform  (and 
that  was  the  great  object  labored  for)  by  extin¬ 
guishing  the  State  banks?  Did  they  propose  the 
exercise  ofa  power  of  that  kind  ?  No;  that  is  left 
with  all  other  extraordinary  powers,  to  be  looked 
up  for  this  occasion.  It  was  never  heard  of  be¬ 
fore.  Was  it  proposed  to  tax  them  out  of  exist¬ 
ence?  They  never  thought  of  doing  that  then, 
and  did  nothing  of  the  kind. 

The  next  thing  I  come  to,  Mr.  President,  is 
whether  the  proposed  measure  will  end  our  State 
banks?  The  bill  which  is  the  cognate  of  this,  a 
part  of  the  system,  taxes  the  State  banks  two  per 
cent,  annually  upon  their  circulation.  In  all  our 
country  banksat  the  East  the  circulation  is  always 
more  than  the  capital  of  the  bank;  otherwise  they 
could  make  nothing,  because  their  business  is  en¬ 
tirely  confined  to  circulation.  They  have  no  ex¬ 
change,  or  none  that  amounts  to  anything.  And 
here  you  will  observe,  and  I  wish  it  borne  in  mind 
in  my  after  remarks,  if  any  man  pays  any  atten¬ 
tion  to  them,  that  the  theory  of  this  proposed 
system  is  that  there  shall  be  no  exchange.  These 
notes  are  to  be  uniform  in  their  currency  every¬ 
where,  all  alike.  That  is  the  great  excellence  of 
this  scheme;  and  then,  of  course,  there  will  be 
nothing  to  pay  for  exchange.  The  difference  of 
price  between  the  currency  of  different  points, 
Avhich  makes  the  exchange,  will  not  exist  at  all. 
That  is  what  is  claimed.  Of  course,  then,  the 
business  of  banks  anywhere  and  everywhere 
hereafter  will  be  merely  loaning  their  money  and 
accommodating  the  people  with  loans  of  their 
money,  not  with  their  capital — that  is  lent  to 
the  Government — but  on  notes  which  are  fur¬ 
nished  them  for  circulation.  As  for  exchange, 
this  ends  it,  if  the  theory  and  principle  of  this  bill 
is  right.  • 

A  bank  which  has  $100,000  of  capital  in  New 
England  must  keep  out  more  than  $100,000  in 
bills,  or  it  makes  nothing.  Then  you  tax  the 
bank  not  immediately  on  its  capital,  but  the  pro¬ 
posed  tax  is  two  per  cent,  on  its  circulation.  That 
would  be  about  three  percent,  on  its  capital.  Now, 
however  extravagant  a  gentleman  may  think  me 
who  looks  beyond  the  Ohio,  I  tell  him  all  the 
banks  of  New  England,  and  1  think  of  New  Y  ork, 
too, averaged  around  among  them,  have  not  made, 
and  do  not  make,  and  cannot  make,  more  than 
seven  per  cent,  a  year.  Whenever  stockholders 
put  their  money  into  a  bank  and  cannot  make 
more  than  six  per  cent,  lawful  interest,  they  will 
soon  draw  it  out.  They  may  be  willing  to  take 
that  much  interest  for  one  year;  but  if  it  turns  out 
in  the  course  of  years  that  they  cannot  realize 
more  than  six  per  cent,  from  their  investment  in 
a  bank  the  stockholders  will  say,  “  we  cannot 


afford  to  hire  you  as  a  bank  to  do  our  business; 
let  us  have  our  money  back ;  we  can  make  six  per 
cent,  out  of  it  ourselves.”  When  a  bank  cannot 
make  six  per  cent,  it  will  soon  wind  up. 

This  tax,  as  I  say,  is  just  about  three  per  cent, 
on  their  capital.  They  make  but  seven  per  cent, 
von  their  capital  at  best,  after  paying  expenses. 
Take  three  from  that,  and  there  is  but  four  per 
cent.  left.  Now,  I  say — and  it  does  not  need  many 
words  on  that  point — that,  as  a  matter  of  course, 
this  ends  our  banks,  and  they  must  be  wound  up. 
It  is  intended  to  be  so.  If  it  does  not  effect  that 
purpose  sooner  or  later,  then  the  great  purpose  of 
this  bill  fails;  you  do  not  get  a  uniform  national 
currency.  If  this  will  not  do  it,  more  shall  do  it; 
and  a  larger  tax  will  be  imposed.  That  is  part  of 
the  system;  but  I  grant  that  this  will  do  it. 

There  has  been  some  strange,  and  I  may  say 
extraordinary,  talk  on  this  subject.  It  is  said  that 
two  per  cent,  is  no  more  than  a  reasonable  revenue 
tax  on  a  bank,  and  that  it  is  only  fair  and  equal  in 
our  system  of  taxation  to  impose  that  rate.  I 
wish  to  call  attention  for  a  moment  to  that  pre¬ 
tense.  It  is  more  than  intimated  in  the  reportofthe 
Secretary  of  the  Treasury  and  the  President’s  late 
message  that  a  bank  makes  its  bills  and  circulates 
them, and  that  doesnotcostitmuch,and  weeharge 
manufacturers  three  per  cent,  tax  on  the  articles 
they  make  and  carry  to  market  and  sell;  and, 
therefore,  it  is  no  more  than  equal  to  tax  the  banks 
three  per  cent,  on  the  circulation  they  have  out. 
When  a  manufacturer  is  taxed  three  per  cent,  on 
the  article  he  manufactures,  on  the  cloth  he  makes, 
every  one  knows  that  when  he  sells  the  cloth  he 
puts  the  three  per  cent,  on  the  price;  and  every 
man  through  whose  hands  that  cloth  passes,  takes 
it  with  that  three  per  cent,  added  to  the  original 
price  as  part  of  the  value.  In  that  way  the  man¬ 
ufacturer  gets  back  the  three  per  cent.  Now,  take 
the  case  of  a  bank.  Suppose  a  bank  issues  $1,000 
circulation  and  is  taxed  two  percent.  Can  it  say 
to  the  man  that  takes  it,  that  is  $1,020  ?  Can  the 
man  take  it  at  $1,020  and  pass  it  off  for  that,  and 
so  have  it  go  current  in  the  world  as  $1,020?  Cer¬ 
tainly  not.  Then  there  is  no  resemblance  between 
the  two  cases.  There  is  an  obvious  delusion  in 
undertaking  to  make  a  resemblance  of  that  kind 
where  none  exists. 

It  is  said,  however,  that  it  is  a  fair  tax  in  pro¬ 
portion  to  our  other  war  taxes.  Let  us  look  at  this 
for  a  moment.  My  neighbor  here,  [Mr.  Fessen¬ 
den,]  we  will  say,  has  $100,000,  the  result  of  his 
long  earnings. 

Mr.  FESSENDEN.  Oh,  no. 

Mr.  COLLAMER.  I  hope  he  will  have  it.  If 
my  will  would  give  it  to  him,  he  should  have  it. 
He  has  $100,000  saved,  we  will  say,  and  having 
retired  from  business  he  lives  by  loaning  out  that 
money,  And  he  realizes  six  per  cent,  a  year  on 
it.  How  much  do  we  tax  him?  One  hundred 
and  eighty  dollars,  three  per  cent,  on  what  he  gets. 

1  am  going  now  upon  the  ground  that  he  has  got 
$6,000  income  in  some  other  way.  We  tax  him 
three  per  cent,  on  his  gain;  and  that  is  $180,  al¬ 
though  he  has  used  $100,000.  Here  are  three 
other  neighbors  of  mine — l  will  not  include  my¬ 
self,  because  that  would  make  the  supposition  too 
improbable — who  have  $100,000,  and  they  bank 


with  it  according  to  the  law  of  their  State.  What 
do  they  make?  Perhaps  they  make  eight  per  cent. 
If  they  do  make  $8,000  on  the  $100,000,  they  have 
to  pay  a  tax  of  three  per  cent,  on  that  now,  and  it 
goes  into  the  Treasury.  But  what  is  the  proposi¬ 
tion  here?  The  Government  says  to  them,  “  you 
have  got  $100,000  invested  in  hanking;  you  will 
therefore  probably  have  about  $150,000  of  circu¬ 
lation;  we  will  tax  you  on  the  $150,000  one  per 
cent,  every  six  months,  or  two  per  cent,  a  year.” 
How  much  will  that  be?  Three  thousand  dollars. 
“  For  the  use  of  your  $100,000  in  banking  you 
shall  pay  $3,000  a  year.”  The  other  man,  for  the 
use  of  his  $100,000,  pays  but  $180  a  year.  Do 
you  call  that  fair  and  equal  taxation?  The  one 
pays  $180,  while  the  other,  on  the  same  amount  of 
capital,  pays  $3,000.  It  is  perfectly  monstrous. 

It  is  said,  however,  that  it  is  proposed  to  tax 
the  associations  that  shall  be  organized  under  this 
bill  two  per  cent,  on  their  circulation,  and  there¬ 
fore  it  is  no  more  than  fair  that  we  should  tax  the 
State  banks  two  per  cent,  on  their  circulation. 
Let  us  attend  to  that  for  a  moment.  That  sug¬ 
gestion  is  quite  plausible,  and  may  go  down  with 
a  man  who  will  not  think  on  the  subject  or  listen 
to  anything  about  it.  But  let  us  look  at  it.  The 
bank  which  is  formed  by  association,  under  this 
bill,  must  always  have  its  circulation  less  than 
the  principal,  because  it  receives  but  ninety  per 
cent,  on  its  deposit  of  bonds  for  the  purpose  of 
circulation,  and  then  it  has  always  to  keep  on 
hand  twenty-five  per  cent,  more  of  other  money  to 
redeem  its  circulation.  To  work  a  bank  of  this 
kind,  therefore,  you  put  in  $100,000  in  bonds,  and 
then  take  out  $90,000  in  notes,  and  must  keep  on 
hand  $22,500of  other  money,  twenty-five  percent, 
of  the  $90,000,  to  redeem  with.  Such  an  associa¬ 
tion  would  have  to  pay  two  per  cent,  only  on  the 
$90,000  of  circulation.  Now,  take  a  State  bank 
which  has  $100,000  capital,  and  must  circulate 
$150,000  to  make  anything.  You  make  that  bank 
pay  two  percent,  on  $150,000,  and  the  other  bank 
two  percent,  on  $90,000,  and  yet  you  call  that  equal. 

Again:  the  Government  says  to  the  banks  or¬ 
ganized  underthisbill,“  we  will  take  your  money ; 
we  will  pay  it  out  to  the  soldiers  and  to  all  our 
creditors;  we  will  make  it  a  national  currency; 
we  will  guaranty  the  payment  of  it,  if  you  will 
enter  into  this  bargain  with  us.”  Can  they  not 
very  well  afford  to  pay  two  per  cent,  to  have  all 
these  privileges?  Then  you  turn  around  to  the 
State  banks  and  tax  them  two  per  cent.,  but  you 
will  not  take  a  dollar  of  their  money;  you  will  not 
circulate  any  oftheir  money ;  you  decry  them  here 
before  the  nation;  you  engage  the  most  eloquent 
men  in  the  Senate  to  bring  them  into  disrepute 
and  contempt,  and  seek  to  annihilate  them  if  you 
can,  and  yet  tax  them  two  per  cent.  Is  this  equal  ? 

But  go  a  step  further.  You  say  by  this  bill, 
“  put  your  money  here  into  these  associations, 
and  there  shall  be  no  State  tax  levied  on  you;” 
but  you  say  to  the  State  banks,  “all  your  stock, 
all  your  property  is  subject  to  taxation  by  the 
States,”  which,  I  take  it,  in  the  various  forms  of 
taxation,  State,  county,  town,  &c.,  amounts  to 
two  per  cent.  1  think  1  am  putting  it  quite  low  in 
time  of  war  when  I  put  it  at  two  per  cent.  You 
clear  the  banks  created  under  this  bill  of  all  State 


tax,  and  they  pay  you  two  percent.  On  the  other 
hand,  you  say  to  the  State  banks  that  they  shall 
pay  the  two  per  cent,  to  you,  and  be  subject  to  all 
these  taxes.  Do  you  call  that  equal?  Do  you  call 
it  fair? 

Our  largest  city  banks, it  will  be  observed,  have 
very  little  circulation.  Some  of  the  very  largest 
have  none  at  all,  and  most  of  them  have  very  lit¬ 
tle.  They  care  nothing  about  circulation.  They 
do  business  on  deposits.  A  law  taxing  circula¬ 
tion  does  not  reach  them  at  all.  Now,  doing 
business  on  deposits  amounts  exactly  to*he  same 
thing  as  doing  business  on  circulation.  In  the 
cities  the  people  do  not  keep  their  money  in  their 
pockets,  but  take  it  to  banks  and  deposit  it,  and 
they  take  it  out  whenever  they  want  it.  The 
banks,  knowing  from  experience  about  how  much 
deposits  they  will  always  have  on  hand,  make 
their  calculations  to  accommodate  people  on  the 
strength  of  the  deposits.  How  is  it  with  the 
country  banks?  In  the  country  the  people  keep 
their  money  in  their  own  pockets;  do  not  deposit 
it  in  bank.  The  banks  from  experience  see  about 
how  much  of  their  circulation  is  kept  out  all  the 
while,  and  they  accommodate  the  people  on  the 
strength  of  that.  Is  not  the  result  exactly  the 
same?  What  difference  does  it  make  to  the  bank 
whether  I  keep  in  my  pocket  the  money  they  issue 
or  put  it  into  their  vault?  It  amounts  to  precisely 
the  same  thing  to  them;  and  yet  you  say  by  your 
tax  bill  that  those  who  use  the  circulation  shall 
pay  two ‘per  cent,  a  year,  and  those  banks  that 
work  on  deposits  shall  pay  nothing  at  all;  thus, 
if  you  please,  subsidizing  all  our  country  banks 
to  the  large  city  institutions. 

But  you  say,  “  well,  if  we  destroy  your  coun¬ 
try  banks  by  taxing  them  out  of  existence  on  their 
circulation,  the  people  will  be  resupplied  by  new 
banks  made  under  this  bill.”  I  believe  no  new 
banks  will  be  made  under  this  bill  in  the  country. 
I  cannot  say  what  may  be  done  in  the  cities;  and 
I  do  not  know  but  what  there  might  be  some  made 
in  some  of  the  States  in  the  West  where  their  in¬ 
terest  is  ten  per  cent.  I  believe  there  have  been 
some  such  States;  whether  there  are  any  now  I 
do  not  know.  Inasmuch  as  they  may  lend  money 
at  the  rate  of  interest  legal  in  the  State  where  they 
lend  it  under  this  bill,  if  there  is  any  place  where 
they  can  take  this  ninety  per  cent,  of  notes  and 
go  and  lend  it  at  ten  per  cent,  a  year,  they  may  get 
along  with  it;  but  I  cannot  answer  for  that.  My 
notion,  however,  has  been  that  very  heavy  per 
cent,  interest  is  merely  nothing  more  nor  less  than 
the  correlative  of  very  poor  security.  They  gen¬ 
erally  go  together.  But  I  am  talking  now  of  the 
country  at  the  East,  where  our  rate  of  interest  is 
six  per  cent.,  and  about  the  probability  of  men 
there  going  and  getting  these  bonds  for  the  pur¬ 
pose  of  setting  up  a  bank;  I  know  that  men  will, 
when  they  have  money  out  of  use  in  n  lime  of  war, 
buy  United  States  stocks;  and  they  hold  them  in 
their  own  hands.  Some  will  put  money  on  de¬ 
posit  and  take  a  certificate  for  it  and  take  four  or 
five  per  cent,  interest,  so  ns  to  have  it  where  they 
can  get  it  on  demand.  Some  will  take  seven-thirty 
bonds,  or  six  per  cent,  bonds,  holding  them  in 
their  hands,  watching  the  fluctuations  of  the  mar¬ 
ket,  and  watching  the  chances  of  war,  and  all  that, 


F 


12 


* 


to  put  tnem  out  of  their  hands  whenever  conve¬ 
nience  requires.  But  here  you  are  asking  these 
people  that  they  shall  go  and  buy  these  bonds  as 
a  permanent  investment,  set  up  their  banks  upon 
them,  put  them  in  operation,  and  place  the  bonds 
where  they  cannot  control  them  at  all;  put  their 
circulation  out  on  the  faith  of  the  bonds,  and  make 
a  pet  manent  investment  for  twenty  or  thirty  years 
to  come.  They  will  be  very  slow  to  do  that. 

But,  in  the  next  place,  I  think  it  a  mere  matter 
of  figures  and  capable  of  mathematical  certainty 
about  this  problem  of  whether  banks  will  be  set 
up  in  my  part  of  the  country  under  this  bill,  even 
if  the  existing  banks  are  all  destroyed.  To  illus¬ 
trate  it,  1  will  take  the  plain  case  of  a  $100,000 
bank,  because  that  is  the  ordinary  size  of  a  coun¬ 
try  bank  in  my  part  of  the  country,  and  it  is  in 
round  numbers  easy  of  calculation.  You  are  to 
taice  $100,000,  go  and  buy  bonds  with  it,  leave 
<  them  there,  and  take  out  $90,000  of  circulating 
•  notes.  As  to  exchange,  that  is  to  be  the  same  all 
over  the  country,  and  that  is  to  be  no  item  in  the 
profit  of  a  bank  hereafter. 

Now  let  us  see  how  it  will  work.  In  the  first 
place  I  believe  I  am  borne  out  by  examination  of 
.experienced  men  in  saying  that  you  cannot  oper- 
,ate  a  country  bank,  or  any  bank  of  the  amount 
of  $100,000,  with  less  than  $2,500  per  year.  Pay 
.your  cashier,  open  your  office,  warm  it,  light  it, 
take  care  of  it,  pay  yourexpresses,  and  do  all  your 
.business, and  itcannotbe  done  for  less  than  $2,500, 
and  that  is  putting  it  very  low.  -Now,  a  $100,000 
bunk  under  this  bill  will,  in  the  first  place,  get 
from  the  Government  of  the  United  States  $4,000 
a  year  interest,  after  paying  the  tax.  We  under¬ 
stand  that.  They  lend  the  $90,000  which  they 
receive  and  they  get  six  percent,  interest  on  that. 
That  interest  would  amount  to  $5,400.  There  is 
ail  they  can  make  without  stealing.  It  is  all  that 
can  be  made.  What  does  it  cost?  It  costs  $2,500 
to  operate  the  bank,  the  ordinary  expenses,  and 
they  lose  the  use  of  $22,500  for  that  year  because 
they  are  to  keep  on  hand  twenty-five  per  cent,  on 
their  circulation.  They  have  kept  that  on  hand, 
and  of  couise  the  use  of  it  is  lost.  That  is  over 
$1,300.  That  expense  and  loss  makes  $3,800. 
The  interest  from  the  Government  and  the  inter¬ 
est  on  the  $90,000  amounts  to  $9,400.  Deducting 
the  one  from  the  other,  it  leaves  $5,600.  Now, 
what  did  it  make  that  on?  On  the  $100,000  put 
m,  and  the  $22,500  which  was  kept  on  hand.  The 
investment  was  $122;500,  and  the  profit  is  $5,600; 
that  is,  about  four  per  cent.  That  is  all  that  can 
be  made  under  it.  They  are  to  run  the  risk  in 
their  loans  of  all  the  loanings  of  $90,000,  and  get¬ 
ting^  it  out  and  in ,  and  cannot  make  five  per  cent., 
if  ail  works  smoothly  and  there  are  no  losses  at 

all.  I  say  that  is  not  a  matter  of  speculation ;  that 

;s  a  matter  of  certainty.  Those  figures  which  I 
nave  given  in  this  instance  cannot  lie,  which  they 
i|o  sometimes.  1  therefore  say  1  feel  quite  con¬ 
fident — and  that  is  not  merely  my  opinion;  I  have 
compared  my  opinions  with  those  of  men  of  ex¬ 
perience,  who  know  much  more  than  I  do  about 
,t,  and  they  assure  me  that  that  is  assuredly  true 
—that  banks  will  never  be  set  up  under  this  bill 
n  the  country.  In  that  condition  of  things,  Mr. 
President,  all  our  people  in  the  country  are  to  be 


sent  to  the  cities  for  all  their  loans,  where  their  se- 
cui  ities  aic  not  known,  and  it  becomes  impractica¬ 
ble  to  get  along,  and  these  banks  will  not  be  sub¬ 
stituted  in  the  place  of  the  present.  Hence  I  take 
it  that  if  1  am  right  in  these  views  we  must  look 
t°  the  winding  up  of  our  banks,  a  system  with 
which  our  people  are  entirely  content,  and  under 
which  and  with  which  they  prosper,  and  which 
they  prefer. 

Now,  is  there  any  great  national  necessity  that 
compels  us  to  drive  the  chariot  of  State  rough¬ 
shod  o\ei  these  institutions?  I  care  nothing  for 
the  banks;  they  are  not  what  I  am  talking  about. 

1  stated  in  the  beginning,  and  I  state  again,  that 
my  trouble  is  in  relation  to  the  people;  that  this 
destioying  these  agencies  of  theirs,  commonly 
cahed  fiscal  agencies,  these  pecuniary  institutions, 
interwoven  with  all  their  business,  will  bring  dis¬ 
tress  and  ruin  on  our  people,  and  distribute  that 
rum  through  all  parts  of  society. 

Mr.  President,  I  do  owe  a  little  something  to  our 
banks.  I  should  not  say  that  I  care  nothing  for 
them;  I  mean  as  a  public  man.  The  banks  of  our 
cities  aided  very  freely  and  as  long  as  they  could 
this  Government  in  the  beginning  of  this  war,  and 
something  is  due  to  them.  I  can  say  that  but  for 
the  assistance  of  the  banks  of  Vermont  we  could 
never  have  put  our  troops  in  the  field,  and  I  be¬ 
lieve  that  to  be  true  of  New  Plampshire,  and  1  do 
not  know  but  that  it  is  of  Connecticut. 

Mr.  FOSTER.  I  think  it  is. 

Mr.  COLLAMER.  I  have  no  doubt  it  is  true 
there.  We  never  could  have  put  our  men  in  the 
field;  and  I  would  have  it  borne  in  mind  that  we 
have  put  in  every  man  that  we  have  been  asked  for. 
We  not  only  furnished  the  amount  of  all  the  calls 
made  upon  us,  but  filled  up  all  our  old  regiments, 
to  the  amount  of  between  two  and  three  thousand 
men.  Everything  asked  of  us  has  been  done.  1 
claim  no  particular  merit  for  this.  We  have  done 
no  more  than  our  duty,  which  we  were  willing  to 
do;  and  now,  when  the  bodies  of  these  sons  of 
ours  are  brought  home  and  carried  far  up  among 
°ur  mountain  recesses,  or  information  is  received 
of  their  death  on  the  Chickahominy,  our  people 
know  that  an  enemy  has  done  this.  But  what 
shall  I  tell  them  when  there  must  bean  immediate 
collection  of  all  the  debts  they  owe  to  the  banks, 
and  a  winding  up  of  all  their  business  connected 
with  the  banks,  and  the  distress  that  will  follow — 
what  shall  I  say  to  them  ?  A  friend  has  done  this; 
it  has  not  been  done  by  an  enemy.  I  do  not  know 
what  will  be  the  consequence,  i  can  merely  say 
that  I  do  not  hold  myself  responsible  for  the  po¬ 
litical  consequences  of  such  an  act.  1  believe  my 
State  is  as  loyal  a  one  as  there  is  in  the  Union. 

I  think  we  have  exhibited  it,  manifested  it  fully; 
but  our  people  can  be  unnecessarily  distressed  to 
an  amount  that  they  will  not  endure.  I  do  not 
say  that  they  will  resist  by  revolution,  but  I  mean 
that  they. will  hardly  admire  an  Administration 
which  visits  upon  them  such  calamities  in  return 
for  what  they  have  done. 

Mr.  President,  some  arguments-  are  used,  or 
some  tilings  that  are  called  arguments,  to  which 
I  can  hardly  trust  myself  to  reply,  for  fear  I  shall 
be  wanting  in  courtesy.  It  has  been  more  than 
intimated  to  us  in  this  debate  that  if  a  man  will 


13 


notgive  up  the  protection  of  any  local  interest  that 
stands  in  the  way  of  the  great  national  problem 
before  us,  he  is  unfaithful  to  the  Government.  I 
cannot  do  it  on  this  occasion.  I  know,  too,  that 
men — I  will  not  call  bad  names — political  re¬ 
formers,  get  up  a  project  which,  with  them,  is  an 
ideal  perfection  and  an  absolute  necessity,  and 
they  have  worked  upon  it  until  they  have  got  into 
lhatcondition  when  they  thinkevery  thing  on  earth 
must  give  way  to  it,  and  everything  that  does  not 
give  way  to  it  is  an  enemy  to  the  country;  and 
every  man  who  does  not  agree  to  it  is  an  enemy 
to  the  country.  To  add  to  that,  we  are  told  in 
the  Senate  that  the  whole  Cabinet  are  in  its  favor. 
Mr.  President,  it  is  not  many  years  since  a  man 
would  have  been  called  to  order  for  using  an  ex¬ 
pression  of  that  kind  in  the  Senate.  Men  have 
been  called  to  order  for  such  expressions.  Legis¬ 
lation  is  to  be  left  to  the  House  of  Representatives 
and  theSenate;  itis  theexercise  of  their  judgment, 
not  the  authority  of  others,  which  is  to  give  cur¬ 
rency  and  support  to  measures.  If  it  has  come 
to  this,  that  it  is  to  be  more  than  intimated  that 
we  are  not  to  consult  our  understanding,  not  to 
indulge  ourselves  in  reasoning  about  a  matter,  but 
we  are  to  be  told  ex  cathedra  by  the  organ  of  the 
Administration  that  the  Cabinet  desire  and  are  all 
in  favor  of  a  certain  thing  as  an  argument  to  in¬ 
duce  us  to  come  into  it,  it  seems  to  me  that  im¬ 
plies  a  degree  of  subserviency  that  can  hardly  be 
expected.  I  respect  those  gentlemen  in  their  posi¬ 
tion;  but  do  you  not  know,  Mr.  President,  that 
our  people  were  very  careful  in  forming  the  Con¬ 
stitution  that  the  ministry  should  not  be  admitted 
on  the  door  of  Congress?  They  would  not  have 
it  like  the  British  Parliament,  where  the  members 
of  the  ministry  are  admitted  upon  the  floor  of  the 
House  of  Commons  and  the  House  of  Lords. 
Our  people  carefully  provided  against  that.  They 
■would  not  have  it  here.  They  would  have  no 
such  influence  as  that  operating  on  either  House 
of  Congress.  So  we  are  to  have  it  second  hand; 
they  are  not  to  come,  but  they  are  to  send  their 
views  to  us.  I  respect  all  men  in  official  position 
in  their  place;  and  that  is  all  they  should  expect 
of  us.  I  say  of  these  men  without  offense — 1  will 


not  call  them  as  John  Randolph  did,  the  Presi¬ 
dent’s  clerks — but  I  say  we  made  them.  Wc  are 
not  to  be  dictated  to  by  them,  nor  do  I  believe 
they  ever  attempted  any  such  thing,  or  ever  in¬ 
tended  any  such  thing.  I  have  no  idea  there  was 
ever  any  such  errand  sent;  but  the  Senator  from 
Ohio  seemed  to  suppose  that  it  was  weighty  and 
worthy  of  great  consideration  here,  or  he  would 
not  have  mentioned  it.  I  intend  to  consult  my 
:  own  judgment  in  the  discharge  of  my  official  du¬ 
ties.  If  other  gentlemen  are  willing  to  let  their 
j  conscience  swing  loose  from  its  moorings,  and  to 
(  cease  to  consult  their  own  judgments  in  reference 
to  measures,  but  rather  to  consult  their  own  safety 
for  fear  they  will  fall  into  contempt  by  being 
charged  with  being  unfriendly  to  the  Government, 
and  will  therefore  give  up  all  further  consideration 
of  the  subject,  they  may  do  it;  but  1  should  like 
to  know  when  that  time  comes;  that  is  all. 

Mr.  President,  in  closing  I  have  one  thing  fur¬ 
ther  to  say,  and  that  is  if  such  an  experiment  as 
this  is  desired,  some  time  of  peace  should  be  se¬ 
lected  when  the  community  can  better  bear  it.  To 
begin  a  general  pecuniary  revolution  at  this  time, 
when  there  is  an  armed  revolution  in  the  country 
and  we  desire  that  every  nerve  should  be  strained 
I  against  our  enemies,  seems  to  me  very  singular. 
This  i3  a  very  inauspicious  period  to  remodel  so¬ 
ciety  and  recast  the  order  of  business.  It  is  in¬ 
voking  a  degree  of  suffering  which  the  occasion 
does  not  demand.  I  agree  with  the  Senator  that 
there  is  nothing  desperate  in  the  condition  of  our 
affairs.  I  agree  with  him  that  there  is  nothing 
at  all  alarming  in  our  pecuniary  affairs.  We  have 
not  sold  any  stock  below  par.  We  have  provided 
for  the  raising  of  taxes  enough  to  pay  the  interest 
on  our  public  debt,  if  we  increase  that  debt  three¬ 
fold.  We  can  pay  our  ordinary  expenses  with¬ 
out  trouble,  and  we  can  pay  our  interest  in  gold, 
and  we  do  it.  Nor  has  any  calamity  come  or  any 
!  suffering  been  endured  in  relation  to  our  pecuniary  • 
affairs,  nor  need  there  be.  Therefore  there  can¬ 
not  be  an  excuse  on  this  occasion  or  in  the  cir¬ 
cumstances  in  which  we  stand  as  a  country  for 
putting  in  operation  so  sweeping  and  extraordi¬ 
nary  an  experiment  as  this  at  this  juncture. 


» 


•  • 


i 


